Wall Street Saddles Up for a Hillary Clinton Presidency

October 31, 2016

Series Content

Nomi Prins says just one example of Wall Street influence in running the government is Jack Lew, Secretary of the Treasury, he was former Citigroup COO and former Deputy Secretary of State under Clinton and Chief of Staff at the White House

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Story Transcript

On the 7th of October, WikiLeaks started releasing thousands of emails which were apparently hacked from the email account of John Podesta, the Chairman of Hillary Clinton’s 2016 presidential campaign. John Podesta was also former Chief of Staff for President Bill Clinton and special advisor to current president, Barack Obama, where he worked until 2015. Among the many thousands of emails recently released by WikiLeaks known as the Podesta Emails, it includes articles written by journalist Nomi Prins. Including one titled the Clintons and Their Banker Friends.

Well joining us today to speak about the WikiLeaks and Hillary Clinton’s relationship to Wall Street is Nomi Prins. Nomi Prins is a journalist and author of 6 books including most recently, All The Presidents’ Bankers: The Hidden Alliances that Drive American Power, published by Nation Books. Nomi it’s good to have you with us.

Thank you very much.

NOMI PRINS: Thank you very much.

PERIES: So Nomi, you also have an article this week out in Tom Dispatch called Waking Up In Hillary Clinton’s America: Wall Street in the Saddle. Well that is a good in to this discussion. Give us a sense of what we have thus far uncovered about Hillary Clinton’s alliances to Wall Street and what we can expect when we wake up on November 9th.

PRINS: Well first of all, for Hillary Clinton, the long answer to that would take us hours. The short answers a couple of things. There are the historical relationships of course that the Clintons have had since Bill Clinton ran in the early 90’s which joined into Goldman Sachs in particular. One of his major campaign contributions organizers was Robert Rubin who was a Co-CEO of Goldman Sachs as a thank you for doing that for Bill Clinton appointed him as Treasury Secretary. Under Robert Rubin is when a lot of deregulation discussion with congress happened, relative to the banking sector which ultimately led to they repealed the Glass–Steagall Act of 1933 which had separated the risky banks activities from people’s deposits and loans. It wasn’t repealed while Robert Rubin was there in the Clinton administration. It was repealed just after he left the Clinton administration to join Citi Group which is one of the big 6 banks in the United States and of course one of the banks that most benefited from that piece of deregulation that happened under the Bill Clinton administration.

If we fast forward just a little bit to Hillary Clinton and past through Obama, we’ve seen for example that Jack Lew who is current Treasury Secretary of the United States under Obama, came into Washington through Hillary Clinton. Actually he was originally her deputy Secretary of State, while she was Secretary of State. She picked him from Citi Group. Jack Lew had been working at Citi Group during the financial crisis in a part of Citi Group that was very instrumental in being [imbibed] a cause of that crisis. Afterwards he went into Hillary Clinton’s Secretary of State department and now he’s currently the Treasury Secretary.

So, that’s one example of multidecades of ties between the people that run the political financial elements of this country and that have connections through both Clintons. Not just Bill Clinton, not just deregulations, not just the ideology of regulation but through Hillary Clinton, through Goldman Sachs, through Citi Group. Those are just two men, two banks, two presidents with one in between, well one coming up depending on what happens in November 8th. The WikiLeaks files that were dumped recently, they show some of the commentary that Hillary Clinton climate has made in particular at speeches to Goldman Sachs.

Again, very instrumental our legislation, in power in Washington, in the Clintons’ world in general which really indicated her friendship with that organization and her viewing what Goldman Sachs and other Wall Street powerbrokers do as being sort of intrinsic to regulation. I made some mistakes but she still believes and have told them during the speeches in so many words, that they could regulate themselves. She just said that regulators in the future, should come from these organizations because they know the financial industry best. Of course, they also wreck the financial system but she did not say that to them.

PERIES: We know from what President Obama inherited in terms of the economic depression we went into. Actually his entire reign here as president, we’ve been suffering the consequences of that. And if we now believe that Hillary Clinton as president is also going to be continuing her relationships with Wall Street and letting it regulate itself are we to then believe that all of what she’s saying in her campaign about being tough on Wall Street is a lot of BS?

PRINS: Yea I mean it’s a very populist opinion and a populist way of stating things I should say. It’s not necessarily her opinion, it’s what she needs to say. It’s interesting since Bernie Sanders left the race, she’s really changed and reduced her rhetoric against Wall Street and pro any kind of more tighter regulation on Wall Street. She has said she has a plan that’s better than Dodd Frank, which was the plan that Obama introduced in 2010 in the wake of the financial crisis that’s supposedly was going to contain systemic risks from the banking system on the rest of mainstream going forward.

The reality is and it’s a bill with a lot of lobbyist language in it. I did the analysis of the number of lines versus the number of things that are actually relevant and it’s something like 8% and everything else is 92% that negates the 8% that could be helpful. So, what it has not done is made the big banks smaller. They are 30% larger in terms of the assets and therefore the power that they have than they were before the crisis.

So that’s what’s happened under the Obama administration. Hillary Clinton hasn’t addressed that. In fact, another thing that’s evident from the WikiLeaks emails, the Podesta emails is that there was a conversation internally with her advisory group where they were discussing before she wrote an op-ed in December 2015 about what she would do to regulate Wall Street that showed up in the New York Times on December 7th 2015 whether or not they should even mention this idea of banks being 30% bigger which was something Elizabeth Warren was saying and so forth and they agreed not to do that. So, this was kind of what was really happening. Now what she’d said during the post Bernie having left the campaign period to try and I think get Bernie supporters onto her side was that she would be tougher.

Now subsequently, in the debates with Donald Trump as the only candidate from the democratic party at the top of the ticket, she’s really watered down and almost not even mentioned Wall Street or regulation or any of that nature and it hasn’t really come up in the debates. It came up in the first debate in a very minor way, the words Wall Street. They didn’t even show up in the other two debates. So it wasn’t something she was going to push herself. It wasn’t something that was asked.

So I believe that’s where we’re really at. If we look at the actual events of her discussions of Wall Street regulation, that’s where we’re at. When the Wells Fargo scandal popped up recently and John Stumpf who was the CEO of Wells Fargo ultimately resigned with a very nice golden parachute from that resignation and 53 hundred employees of Wells Fargo were basically fired for creating fake accounts and making millions of dollars off of creating these fake accounts. She did write a letter that was on her website to the customers of Wells Fargo basically saying they should take responsibility. Individuals should be held accountable. But she never mentioned him by name.

Again that’s much more telling than her saying generally people should be accountable. There was an actual person, a real person with a real name who said he was accountable in front of real congress and she couldn’t even mention his name. So I think that gives us more of an indication of where she’s really at.

PERIES: And Nomi in the article you wrote, you explain why it is that you believe Hillary Clinton’s American could mean 4 years of an economic dystopia. What did you mean by that?

PRINS: Well two things. One is that because the foundations of Wall Street haven’t bene changed, in other words these big 6 banks are bigger than they were before the regulation or the Dodd Frank Act that was label regulation to reduce the risk from them that they could be causing in a potentially second leg of a financial crisis were not really reduced. If you don’t structurally change something, if you don’t break up the complexity, the inability to appropriately regulate the size of these institutions, if you don’t actually hold the CEOs accountable who were running or in some cases still running these institutions despite the fact that these are institutions that have been fine. That have copped in some cases felony charges that pay billions of dollars because of settlements with the Department of Justice, and that the SCC and so forth. If those don’t change and in fact are subsidized instead by the government which they really have been in terms of being able to stay afloat, they’re not going to in and of themselves try to contain what they do going forward.

They’re just trying to get away with what they can get away with in whatever the market environment currently is. But it doesn’t mean that the things that they structure, the types of toxc acids that the core of the crisis, they can still create all those same things again. They might not have subprime loans in them but they may have something else in them. But the mechanism for doing what they did is still intact.

Their size is larger than before the crisis. And we’re also 7-8 years into a policy from the Federal Reserve that has helped to subsidize them by having 0 rates. So effectively making the cost of money that they need for themselves to speculate cheaper. So, we’re really starting at a position where we have a crisis that’s going to be much more dangerous to the rest of the economy. Aside from that in the last 8 years the economy even though some numbers do look better, inequality numbers and social mobility numbers which are really what I look at to indicate financial security amongst real citizens don’t look that good.

So you have a situation where there’s more inequality, there’s less social mobility, there’s a lot of debt throughout the – I’m not talking about government debt but debt in terms of what people have taken on during this period. And if you add to that, a potential financial crisis we’re looking at some real problems. Particularly if nothing has been foundationally been altered.

PERIES: Nomi, in your article you also discussed numerous examples of this thing called revolving door between high level governmental positions and Wall Street. Recently I think there was a Citi Bank WikiLeak that basically prescribed the people that President Obama should appoint back before he was even elected. What do we know about this so far in terms of the revolving door effect related to Hillary Clinton’s potential presidency?

PRINS: As I mentioned there’s Jack Lew who was the current Treasury Secretary. He originally was part of Bill Clinton’s administration. He was actually a sort of junior advisor to Bill Clinton back in 1993 and he basically cycled through different hosts and he ultimately came into Citi Group and from Citi Group he went into being again deputy secretary of State to Hillary Clinton and now Treasury Secretary. So that’s a big loop.

In terms of Goldman Sachs, there’s another person Gary Gensler was involved in Bill Clinton’s administration who was also involved – he was the deputy secretary of Domestic Affairs which relates a lot to domestic finance and the economy back in the Bill Clinton administration. Subsequently he also was part of Obama’s administration in terms of running the commodity future’s trading commission which is the commission that actually relates to the types of derivatives that banks can trade. Some of the open market ones. He also is potentially one of the key picks for being the Treasury Secretary for Hillary Clinton. He’s also former partner of Goldman Sachs.

There’s been different comments about him, that he actually is a bit more pro regulation than some other people that might’ve taken his path in terms of his career but again that remains to be seen. He’s certainly involved with the first Clinton administration in terms of a lot of deregulation they had done and he’s certainly been a part of Goldman Sachs. So it’s hard to know what he’s actually going to do and if he gets that position. But he’s certainly someone who is in the running and has been discussed as being in the running for a position as a Treasury Secretary or something like that in a Hillary Clinton administration.

PERIES: Alright Nomi I know we could go on talking for hours about these connections. But I thank you so much for joining us today and we look forward to having you back very soon.

PRINS: Thank you very much.

PERIES: And thank you for joining us on the Real News Network.

End

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